What is the primary purpose of title insurance in real estate transactions?

The primary purpose of title insurance in real estate transactions is to protect against defects in title or ownership claims. When a buyer purchases a property, they typically want assurance that the title is clear, meaning that there are no legal issues or claims that could affect their ownership rights in the future. Title insurance provides this protection by covering potential losses arising from issues such as unknown liens, misfiled documents, or past ownership claims that weren't discovered during the title search.

In essence, title insurance acts as a safeguard for property owners and lenders alike, ensuring that the legal ownership is defended against unforeseen complications. This is particularly critical because title issues can surface long after the transaction has closed, and resolving these disputes can be time-consuming and costly without the backing of insurance. This certainty allows buyers to confidently proceed with their purchase, knowing they are protected from past title problems.